Stewardship is becoming more sophisticated. But is it becoming more effective?

Investors have never had more tools, more data or more expectations around stewardship. Engagement programs have become more structured. Voting is increasingly integrated with broader ownership strategies. Sustainability data and analytics have become more sophisticated. Regulation and stewardship codes have raised expectations around transparency and accountability.

But there is a question we think deserves more attention. Are we becoming better at stewardship or simply doing more of it?

We think this is an important distinction. More engagement meetings do not necessarily mean more influence. More votes do not necessarily mean better outcomes. And a growing number of reported milestones does not necessarily tell us how much an investor contributed to the change.

Of course, activity matters. It tells us whether investors are using their stewardship capabilities and provides an important degree of transparency. But we believe the next step is to look beyond activity and ask what happens between an investor’s intention and the outcome. This is where we see the next step in the evolution of stewardship, which is moving from measuring stewardship activity to understanding stewardship effectiveness.

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